| The explosive growth in the outsourcing industry in | | | | Threat to confidentiality of company's sensitive |
| recent years has brought about newer outsourcing | | | | information is another of the prime outsourcing |
| challengesneeding more skillful solutions. Thanks to | | | | challenges. Projects involving processing of payroll or |
| rising popularity of the outsourcing trend in the | | | | employees data must be carefully designed so that no |
| developed world, less developed countries led by India | | | | one at the vendor's end can infer much about |
| and China, have discovered a mantra for sustainable | | | | company's private policies. There may be several |
| growth in their low cost skilled labor force. | | | | other types of information that a company may not |
| Despite all the favorable arguments outlining merits of | | | | like its competitors to know. Other than careful project |
| outsourcing, there are some inherent issues that need | | | | designing and camouflaging sensitive data, the only |
| careful consideration. Loss of managerial control is the | | | | option is partial outsourcing – and then processing |
| foremost among outsourcing challenges, particularly for | | | | the vital data in house. |
| big projects that will go on for long durations. It is | | | | Contracting projects offshore is riddled with interesting |
| difficult to exercise control on a vendor's day-to-day | | | | outsourcing challenges – cultural differences being in |
| functioning and on the manner in which project is | | | | the forefront. Handling these challenges require more |
| progressing. This handicap can potentially lead to time | | | | human interaction skills than technical expertise. What |
| and cost over-runs if something less than satisfactory | | | | is a normal polite gesture in one culture may get |
| emerges later. | | | | interpreted in totally unexpected ways across the |
| Such incidents, in fact, spoil most outsourcing | | | | shore. Effective communication, including regular |
| collaborations. Companies normally try to solve this | | | | personal interactions, is the key to preventing problems |
| issue, either by employing their own quality assurance | | | | from arising at the first place, and solving whenever |
| team at vendor's facilities assuming that the vendor will | | | | they arise. Work cultures too can be opposite – |
| cooperate, or by appointing an independent consultant | | | | individualistic workaholic lifestyle on the one side and |
| to overlook the progress of the outsourced activity. | | | | work-and-play-together working style on the other. |
| Another way to tackle the issue of control is to select | | | | Final issue in the list of major outsourcing challenges |
| a vendor who has open and accommodative work | | | | relates to your inability to react when there is sudden |
| culture. You probably will be in the wrong company if | | | | change in external circumstances. While you are stuck |
| the vendor's approach is, “Hand me your project | | | | with an ongoing project that has been outsourced, |
| and don't worry about it any more!” You may feel | | | | business conditions change – it could be some new |
| good hearing these words, but this “hands off” | | | | technology or government policy changes – and |
| approach, either by design or by compulsion, can often | | | | you are forced to redefine and then renegotiate a |
| create vast communication gaps over a period of time | | | | new deal. This threat is all the more real in the current |
| that are too difficult to bridge. | | | | fast changing business environment. |